No less than 12 new burdens for taxpayers in Greece are included in the draft 2018 budget that will be tabled this week, with most of the austerity measures dating from last year's "tax tsumani" - imposed by the leftist-rightist government to meet fiscal targets agreed to with creditors.
By G. Kouros
[email protected]
No less than 12 new burdens for taxpayers in Greece are included in the draft 2018 budget that will be tabled this week, with most of the austerity measures dating from last year's "tax tsumani" - imposed by the leftist-rightist government to meet fiscal targets agreed to with creditors.
As with previous austerity measures imposed during the memorandum era (2010-present), wage-earners, pensioners and self-employed professionals in Greece will feel the brunt.
Austerity measures set to come on line at the beginning of 2018 include:
- A 10-percent reduction in a discount on taxes imposed for medical expenditures, assuming that this spending exceeds, by 5 percent, a taxpayer's total annual income. The government expects to gain 121 million euros from this measure.
- Another tax break linked to the clearance of tax statements by wage earners and pensioners will also be abolished, with the benefit for the state at 68 million euros.
- A reduction, by 50 percent, of the subsidy allocated every year for heating oil purchases by lower-income households, which is expected save 47 million euros.
- A tax aimed at short-term property leasing, essentially an "AirBnB tax", which will tack on such income on a taxpayer's total yearly income for tax purposes.
- Abolition of a tax break linked to Parliament deputies' remuneration as well as the salaries of judicial officers (judges, prosecutors etc.), a measure expected to save the state 44 million euros, but one that nevertheless affects very few people in the country.
- A much-vilified overnight stay surcharge slapped on hotels and rooms-to-let, beginning at 0.5 euros per room and reaching up to four euros a day per room for five-star hotels. The tax was announced in 2016, but was suspended for a year due to significant opposition by tourism professionals in the country.
- An increase in the VAT rates for 32 eastern Aegean islands, which previously enjoyed a lower VAT regime compared with the rest of the country. As such, the lowest rate will go from 5 percent to 6 percent; the medium rate from 9 percent to 17 percent, and the highest rate from 13 percent to the "Scandinavian" level of 24 percent.
- A return of a 15-percent tax on "surplus value" from real estate transactions, i.e. taxing the profit derived from the difference between the original purchase price and the subsequent sale price. The tax, which most analysts expect will generate meager results, given a burst "property bubble" in the country and continuing low demand in non-tourism urban areas, burdens the seller.
- Extension, by a year, of a voluntary tax for shipping companies and shipowners, with a target of 107 million euros.
- Abolition of various welfare and unemployment benefits, expected to save the state's coffers 12 million euros.
- An increase in the already high monthly social security contribution rates for self-employed professionals.
- A stricter regime for imposing the rebate and clawback policies in state spending for pharmaceuticals and private health care, respectively, forecast to save 188 million euros.